SGR Fix Gets Cool Industry Reception

If enacted, IPAB would have the authority to impose federal cuts in hospital pay for patients covered by Medicare and Medicaid; raise the IPAB's savings target to 1.5% instead of 0.5% in 2015; impose payment reductions even when Medicare spending does not exceed price index growth rate; and eliminate the trigger that could de-activate IPAB by 2019.

But perhaps the most damaging changes for the industry is the proposal to accelerate the payment cuts to disproportionate share hospitals, home healthcare and Medicare Advantage plans, which is expected to save about $9 billion. "Our members are already planning for cuts in Medicare payments from health reform and the continued shift to a value-based payment system from a volume-based one," Gundling noted. "The shortened timetable will make it even more difficult to adapt to the changes."

While this ambitious proposal would institute significant industry changes, it's not yet at the forefront of many provider minds. Rather, an immediate fix to the looming SGR cuts is generally their top concern, according to Anders Gilberg, vice president of public and private economic affairs with the Medical Group Management Association. Further, Gilberg noted that as only a draft recommendation, it has a long way to go before it would be voted on by Congress.

- Cheryl Clark contributed to this report.

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